Chinese scooter maker Ninebot on Tuesday gained final approval from the Shanghai Stock Exchange to register on the bourse’s Nasdaq-style STAR Market, according to a notice on the board’s website.

Why it matters: The Beijing-based company, incorporated in the Cayman Islands, is expected to become the first foreign-registered company with a variable-interest entity (VIE) structure to list on a stock exchange in Mainland China.

  • The STAR Market, which opened for trading a year ago, has allowed VIEs and unprofitable companies to list, in a bid to lure Chinese tech companies home from New York.
  • The effort started to pay off: Alibaba’s fintech affiliate Ant Group on Monday announced a dual-listing plan to IPO on the STAR Market and the Hong Kong Exchange.

Details: Ninebot has been allowed to submit registration filings to the China Securities Regulatory Commission, the country’s top securities watchdog, for a final review, the STAR Market’s website shows (in Chinese).

  • Ninebot plans to issue around 7 billion Chinese Depository Receipts (CDRs) through its custodian bank, raising more than RMB 2 billion (around $287 million) from the domestic market. CDRs are shares of non-Chinese companies that are allowed to trade on China’s financial markets, functioning similarly to American Depositary Receipts.

Context: Founded in 2014, Ninebot is now the world’s largest vendor of electric scooters. The company snapped up failing American personal-transport manufacturer Segway in 2015.

  • Chinese smartphone maker Xiaomi owns around 22% of Ninebot. The scooter maker is also one of the so-called “Xiaomi ecosystem enterprises”—companies that leverage Xiaomi’s retail channels to sell their products.
  • Ninebot lists Xiaomi as an important customer with related-party sales to Xiaomi accounting for 52.3% of its total revenue in 2019, according to its prospectus.
  • The company booked revenue of RMB 4.6 billion and a net loss of RMB 459 million in 2019.

Wei Sheng

Wei Sheng is a Beijing-based reporter covering hardware, smartphone, and telecommunications, along with regulations and policies related to the China tech scene. Before joining TechNode, he wrote about...